Focus · Dubai OnlineFTSE 100 continued to slide through the afternoon, falling 121 points, or 1.12%, to 10,691 at 2pm and trading close to its session low. Broker activity was mixed across London’s large- and mid-cap stocks on Wednesday, with several notable changes to ratings and price targets. Among FTSE 100 stocks, HSBC cut Burberry Group PLC (LSE:BRBY) to 'hold' with a 1,200p target, while RBC began coverage of AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) at 'outperform' with a 14,500p target. Computacenter PLC (LSE:CCC), a FTSE 250 stock, saw opposing calls. Among other FTSE 250 stocks, Deutsche Bank cut Dunelm’s target to 1,000p from 1,050p, while JP Morgan reduced its target to 1,050p from 1,225p. Overall, broker moves indicate mixed sentiment, with caution towards retailers and healthcare stocks but stronger conviction on pharmaceutical and recruitment names.
The main driver for the FTSE 100’s decline remains the oil shock. Brent crude futures rose 2.93 points to $100.85 a barrel, remaining above the $100 threshold due to escalating Middle East tensions. This has raised concerns about oil supply disruptions and inflation. US stock futures were subdued, with Dow futures down 0.16%, S&P 500 futures flat, and Nasdaq 100 futures up 0.04%. Investors awaited the US Treasury’s bond buyback announcement. The Food and Drink Federation warned UK food inflation could reach 6.4% next July due to higher fuel costs increasing supply-chain expenses, calling for government action to reduce industry costs. FTSE 350 food producers were down 0.20% at 7,615.53, reflecting pressure on the sector from rising energy and supply-chain costs. AB Foods outperformed its sector, rising 0.69% to 2,053p.
UK two- and five-year gilt yields rose to one-week highs, with two-year yields at 4.629% and five-year yields at 4.727%, as markets reassessed inflation risks. Sterling remained firm, with the yen reaching a seven-month high and the dollar under pressure. The pound edged towards two-week highs against the dollar. The euro rose 0.18% to $1.1641 ahead of an expected European Central Bank rate rise on Thursday. Amazon’s first sterling bond sale highlighted growing funding demand from technology companies amid the AI boom, with hyperscalers issuing over $200bn of debt this year.
FTSE losses deepened as Wall Street pointed lower. The FTSE 100 fell 95 points to 10,717, trading close to its session low. Dow futures dropped 152 points, while S&P 500 and Nasdaq futures declined 0.2%. Brent crude climbed above $100 a barrel as escalating US-Iran hostilities intensified fears of Gulf supply disruption.
Small-cap shares remained subdued, with the FTSE SmallCap index falling 20 points to 8,142. Notable small-cap gains included Sovereign Metals (up 4% after Kasiya research indicated $84 million in additional annual EBITDA), Light Science Technologies (secured £800,000 in additional passive fire-protection business), and Active Energy Group targeting power-backed infrastructure developments. Total Graphite appointed Lycopodium to review its Montepuez graphite project feasibility study.
Aberdeen Group PLC (LSE:ABDN) led the FTSE 100 risers, climbing 2% to 252.6p after appointing Torbjörn Magnusson as non-executive director and chair-designate. Magnusson’s appointment suggests investors welcomed his record of delivering growth and shareholder value. The wider FTSE 100 remained 46 points lower at 10,766, with Computacenter, Centrica, BP, SSE, Severn Trent, and Shell also advancing.
The FTSE 100 recovered ground but remained 0.27% lower at 10,782.52 before 9 am. Brent crude approached US$100 a barrel as escalating US-Iran hostilities and attacks on Saudi energy facilities raised fears of further supply disruption. BP gained 1.8%, but concerns about prolonged inflation weighed on the wider market. Sterling’s rise to around US$1.356 provided another headwind for internationally focused companies. The FTSE 250 declined 0.14%, while the AIM All-Share edged 0.07% higher. Computacenter led the blue-chip risers with a 3.2% gain.
The FTSE 100 opened sharply lower on Wednesday as a stronger pound and renewed inflation concerns outweighed support from rising commodity prices. London’s blue-chip index was down 46.59 points, or 0.43%, at 10,765.07 shortly after 8 am. Brent crude climbed 1.52% to US$99.41 a barrel, while West Texas Intermediate gained 1.19% to US$94.14. The advance towards US$100 may support BP and Shell but raises concerns about inflation and elevated interest rates. Gold edged 0.14% higher to US$4,445.19 an ounce, while silver gained 0.42% to US$67.28. Copper remained close to recent record levels at US$6.7768 per pound.
Surging oil prices unsettled global markets. IG expected the FTSE 100 to fall approximately 51 points, or 0.5%, to 10,760. Brent crude traded around $99.01 a barrel after US strikes near Iran’s Kharg Island and attacks on Saudi Arabian energy facilities. The escalating threat to Middle Eastern supplies pushed West Texas Intermediate above US$95, weighing on global equities. Higher oil prices could support BP and Shell but pressure airlines, retailers, and energy-intensive businesses. Wall Street finished firmly lower, with the Dow Jones Industrial Average dropping 1.2%, the S&P 500 declining 0.6%, and the Nasdaq Composite losing 0.3%. US market close saw elevated government bond yields, with the US 10-year Treasury yield at 4.79% and the UK selling a 30-year gilt at a record yield of 5.8168%. Copper provided a potential counterweight for London’s miners after reaching a record $14,728 a tonne. Asian markets were mixed, with Japan’s Nikkei 225 declining 0.3%, the Shanghai Composite slipping 0.1%, and Hong Kong’s Hang Seng falling 0.5%. South Korean shares advanced, while Australia’s S&P/ASX 200 was marginally lower. Sterling remained firm at approximately $1.3551, adding pressure to the FTSE 100 by reducing the translated value of overseas earnings. Gold retreated to around $4,394 an ounce, while Bitcoin traded near $79,050.
Source: Proactive Investors
